Resale home prices in China’s major cities continued to fall in April, driven by a surge in property listings, according to a report from the China Index Academy. The average price of resale homes across 100 Chinese cities dropped by 0.7% month-on-month, reflecting the growing competition among sellers as more properties entered the market.

Rising Property Listings Weigh on Resale Prices

The report highlighted that price cuts have become a common strategy among sellers, with the primary goal of driving sales. The increase in property listings, particularly in core cities, follows the lifting of resale restrictions in some areas, contributing to heightened market competition. The China Index Academy emphasized that price reductions have remained the dominant trend in driving sales in the residential market.

Impact of Real Estate on China’s Economy

The Chinese real estate market, which was once a cornerstone of the nation’s economic growth, continues to play a significant role in the country’s economic landscape. As approximately 70% of China’s household wealth is tied up in real estate, any signs of stabilization or a modest rebound in the property market could provide a much-needed buffer against external challenges, including the possibility of renewed trade tensions with the United States.

Prolonged Decline in Home Prices

Analysts noted that China’s property sector has been grappling with a long-standing downturn, with home prices having plummeted by 20-30% since reaching their peak in August 2021. This sustained decline has raised concerns about the stability of the real estate market, which once accounted for a quarter of the country’s GDP at its peak. The latest figures show a 7.2% year-on-year decline in resale home prices in April, indicating the continued pressure on the market.

Diverging Trends in Resale and New Home Prices

While resale home prices fell sharply in April, new-build home prices showed a more positive trend. The report revealed a 2.5% year-on-year increase in the average price of newly constructed homes in the same 100 cities, suggesting that demand for new properties remains relatively strong compared to the resale market.